The government announces a tax increase on workers' wages to take effect in the future. What happens to current employment and the real wage rate?
A. Both employment and the real wage rate would increase.
B. Both employment and the real wage rate would decrease.
C. Employment would increase and the real wage would decrease.
D. Employment would decrease and the real wage would increase.
Answer: C
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A currency appreciation is disinflationary and contractionary if the
A. inward shift of the aggregate demand curve due to the fall in exports exceeds the outward shift of the aggregate supply curve due to lower input prices. B. outward shift of the aggregate demand curve due to the rise in exports exceeds the outward shift of the aggregate supply curve due to lower input prices. C. outward shift of the aggregate demand curve due to the fall in exports exceeds the inward shift of the aggregate supply curve due to higher input prices. D. inward shift of the aggregate demand curve due to lower input prices exceeds the outward shift of the aggregate supply curve due to the rise in exports.
USX, a steel company, reduced the number of man-hours required to produce a ton of steel from 10.8 in 1982 to 3.8 in 1990, thereby eliminating 55,000 jobs. Technically, this rise in productivity means the
A. marginal product of labor increased. B. average product of labor increased. C. average product of capital fell. D. marginal product of capital fell.
If the nominal interest rate is 6% and the inflation rate is 9%, then the real interest rate is
A) -3%. B) 3%. C) 6.67%. D) 15%.
The key issue in determining the efficiency of public versus private ownership of a monopoly is
a. the tendency for efficient management of publicly owned enterprises. b. the inability of private monopolies to get rid of managers that are doing a bad job. c. the propensity of private monopolies to generate excessive profits. d. how ownership of the firm affects the cost of production.